The Investment Fund of £250 million will be established next year, with an initial payment of £100 million and the remaining £150 million to be paid into the fund in the following two years. This money will be in addition to the money made available annually for capital investment purposes by the Department of Education.
The fund will be established under legislation and will be managed by the National Treasury Management Agency.
The fund will have a three-tier structure, as the Tanaiste, Mary Harney, outlined. Harney, who is also Minister for Enterprise, Trade and Employment, will, with the Minister for Education and Science, chair a new Partnership Forum Expert Advisory Group, chaired by Chris Horn of Iona Technologies, will be established to identify skills' needs and forecast areas for investment; it will be authorised to employ specialist technical expertise in its evaluations. Membership of the group will include representatives of development agencies, as, the IDA, Forbairt, the Departments of Education and Enterprise and Employment and the Higher Education Authority. An Implementation Group, also to be chaired by Chris Horn, will be comprised of representatives of government departments, and will examine how recommendations and decisions can be implemented.
"This will be a partnership of industry, education and government," said Mary Harney, who added that several multi-national companies had already indicated their willingness to invest. She hoped indigenous as well as multi-national companies would invest in the fund. "It will keep Ireland to the forefront of job creation in the increasingly competitive marketplace." Already, tax incentives are available to industries and individuals investing in programmes of this kind.
Section 16 of the Finance Act 1997 provides for a relief from income tax and corporation tax for gifts made to certain thirdlevel institutions, to be used for the undertaking of research, the acquisition of capital equipment, certain infrastructural development and the provision of facilities designed to increase student numbers in areas of skills needs. The relief applies to both personal and corporate donations, with a minimum qualifying donation of £1,000. Projects must be approved by the Minister for Education, who must consult before approving the donation with the Higher Education Authority. A gift made by a company is, for corporation tax purposes, deemed to be a loss.
Section 25 of the same Act provides for the granting of capital allowances in respect of expenditure on certain buildings for the purposes of third-level education. The measure covers both construction expenditure and expenditure on the provision of machinery or plant. Again, such expenditure must be approved by the Minister for Education, but this time must have the consent of the Minister for Finance also. The institution benefiting from the expenditure must have raised at least 50 per cent of the cost from private sources before construction begins - this money will be used solely for the purpose of paying interest, rent and eventually buying back the new building at the end of the lease period. This section covers projects undertaken in a three-year period from July 1st this year. Qualifying expenditure, inclusive of any grants, may be written off at 15 per cent p.a. for six years and 10 p.a. in year seven.
In the area of third-level research, Section 439, Irish Tax Act 1967, allows tax relief for covenants payable for a period of three years to Irish universities, colleges and schools to assist them to teach the natural sciences. In addition, covenants to universities and colleges to carry on research in the natural sciences may also be allowable.
Rebuilding the RTCs
£80m
With the £80 million allocated to the RTC sector under the Education Technology Investment Fund and the establishment of the Business Education Partnership Forum, the colleges can look forward to big changes. Top of the agenda is enhanced campus facilities, but the student profile is also set to change.
In the future, it's predicted, students will no longer be almost exclusively in the 18 to 21-year-old bracket - more adults will be attracted back to education.
The RTCs have long suffered from poorly-built and designed campuses which are in need of upgrading. "The money will enable the campus development plans of all the RTCs to go ahead," confirms Sean MacDonagh, chairman of the Council of Directors of the Technological Sector Institutions.
Meeting The Skills Need
£60m
The £60 million allocated to meet the skills' needs in the computer software industry will support the creation of additional places at technician and degree levels in thirdlevel colleges. This allocation is in response to clearly identified needs in the sector.
According to the Minister, Micheal Martin, some 7,500 extra places will be created in colleges over the next three years, some of them coming on stream next September. Students should be able to apply for places on these courses through the CAO in January, he says. He explains that the first of these places would be in colleges with existing, current, courses which were over-subscribed this year. Officials say the funding at this juncture would assist in installing new equipment for additional students.
Colleges will have to apply to the fund for money for proposed capital investment for courses in this area and the applications would be considered on their merits.
Asked during their news conference if any of the £60 million would be made available for staff training or the provision of extra staff, the Minister said it would not. In spite of the shortage of highly-trained computer teachers in certain colleges, the Minister said that colleges would not be authorised to pay over and above current rates to buy in this teaching expertise.
However, colleges - especially RTCs which have not always attracted great investment from industry - will be encouraged to continue and expand the present inter-action between them and industry, including the use of guest lecturers, brought from high-tech industries into colleges to talk to students.
The Forfas Skills' Group earlier identified potential demands for 1,000 software graduate and 750 technician places each year. Recently, the Minister announced that over 150 technician places would be provided on courses starting in January next; these courses will involve structured work placements and will be completed in 18 months.
Hotels And Tourism
£20m
The RTC/DIT sector will be the biggest beneficiary of the £20 million allocated to hotel and tourism training from the Education Technology Investment Fund. Skills' shortages have been emerging in the areas of tourism and catering and have become a cause of Government concern. Tourism spending boosts the exchequer's takings by £1 billion annually, while the sector employs just under 200,000 people. This is a major boost to an area which has received only modest investment in recent times, despite the fact that in business terms the industry is booming. Expansion is now on the cards at Waterford Institute of Technology and Cork, Tralee, Athlone and Tallaght RTCs. Some 2,000 new places for recruits into the industry are promised. This year, too, ERDF money amounting to £9 million is being spent on updating tourism training facilities at the DIT, Cathal Brugha St and at Galway and Limerick RTCs, while Dundalk RTC and the Hotel Training School, Killybegs, Co Donegal, are also benefiting from ERDF funds, according to Dr Jim McDaid, Minister for Tourism, Sport and Recreation.
Equipment Renewal
£30m
SOME £30 million of the Education Technology Investment Fund is to go for third-level equipment renewal grants. A survey conducted in one college shows that two-thirds of equipment is up to fifteen years old. Experts suggest that the equipment deficit is in the region of £50 to £80 million, a figure growing at £1 million annually.
Research & Development
£15m
Some £15 million is to be spent on research and development technology transfer over the next three years. R&D is vital to the development of indigenous high-tech industries. Small companies lack sufficient resources to carry out R&D and must rely on the third-level sector. The availability of research and development resources will ensure that companies based in Ireland can continue to compete successfully in the global market, the Government says. Researchers are concerned, though, that the fund fails to address the brain-drain problem. At the moment PhD students are considered fortunate if they receive £5,000 annually; others have to live on far less than this. Many opt to take up more lucrative positions in universities overseas.
PLCs And Apprenticeships
£20m
With a £20 million allocation for the PLC and apprenticeship sectors it looks as if these areas are set to boom. The PLC sector has been a major growth area in the past few years. Research shows that participants on PLC courses enjoy high employment rates. Many school leavers are now opting for PLCs over third-level programmes. New teleservices/telemarketing courses have been introduced. Money from the fund will go to improve and expand PLC facilities.
The new fund will also provide extra apprenticeship places. The Programme for a Partnership Government (1993-1997) allowed for 3,500 apprenticeship places in the technology sector. However, the current level of prosperity has resulted in increased enrolment of apprentices and there is a now a shortfall of places in a number of trades, including the electrical, plumbing, carpentry and joinery trades.
The Schools' Programme
£25m
People who noted the announcement of Schools' IT 2000 in April may be justifiably confused by its re-announcement last week, writes Anne Byrne. In April the then Minister for Education, Niamh Bhreatnach, announced a £30 million five-year investment plan to bring more computer education into schools. All 4,000 State schools were to get computer and Internet access by the year 2000. Computer education was to be provided in all schools and up to 14,000 teachers were to be trained in computers and the Internet. Half of the budget was to go for equipment and half for the training of teachers and the development of practices and curriculum products.
Last week we were told that £25 million will be invested in Schools' IT 2000. A separate allocation will be given for recurrent expenses and for the National Centre for Technology, according to a Department spokesman. A further announcement detailing specific amounts is expected within weeks.
So, where does this fit in with the announcement last April? It seems that the £25 million for capital expenditure includes the £15 million announced last April. It's expected that the £15 million allocated for current expenditure will be increased by a similar amount, bringing the total investment to £50 million compared to Bhreatnach's promised £30 million.
